Sir George Christie developed increasingly sure artistic instincts, on the back of the stronger financial position he had achieved for Glyndebourne. Photograph: John Connor/Rex

Where other boys had train sets and bicycles, the young George Christie grew up with his own opera house, which he loved and shared with the world for the rest of his life, always with a keen business sense but also with unfailing personal courtesy. Christie, who has died aged 79, was the same age as the Glyndebourne opera house and festival that his imperious father, John, founded near Lewes, East Sussex, in 1934. He ran them both for nearly 40 years, taking Glyndebourne into the modern age with the rebuilding of the theatre in the 1990s: this was his crowning achievement.

Christie's connection to Glyndebourne could not have been closer. He was born in the family's ramshackle and much rebuilt Sussex manor house, and lived there until handing it over to his son Gus in 2002. George's mother, Audrey (nee Mildmay), had sung Susanna in Mozart's Marriage of Figaro while pregnant with him, in the inaugural production of the inaugural festival in John Christie's privately built, village-hall-style opera house in the Downs. Though the young George went to Eton, where his father had once taught, and to Cambridge to study languages – he left before taking a degree – and then worked for the Gulbenkian Foundation for five years, he was never going to do anything else in life than run Glyndebourne.

Taking over the festival from his ailing father in 1958, he inherited the house when John died in 1962. With his wife, Mary (nee Nicholson), George continued his father's tradition of insisting on long rehearsal times and Sussex seclusion for the festival participants, often encouraging conductors, directors and singers to lodge in the house during the festival, thus ensuring the survival of Glyndebourne's uniquely intimate and collegiate atmosphere, which was universally teased among musicians as "Glynditz".

Although the expanding festival's affairs were soon tied up in trusts and committees, Christie always saw Glyndebourne as his personal possession and was comfortable in his role as an enlightened despot. "I know I shouldn't but, after all, it's my house. I live here. I suppose they must sometimes think I'm an interfering old sod," he said in a 1994 interview. For years after his retirement, he was always happy to talk about Glyndebourne, often with disarming frankness and always over a decent lunch.

Sir George Christie handed the chairmanship of the Glyndebourne board to his son Gus, left, at the end of 1999. Photograph: Rex

It was probably a good job that he was so engaged with his inheritance. John Christie's Glyndebourne had enjoyed a reputation for international artistic standards and general English upper-class eccentricity. But Glyndebourne was often in debt as John continued to extend his original 300-seater theatre. Its future, as Britain's only privately run and funded opera house, was far from certain when George took over, not least because of artistic competition from the Aldeburgh festival, which had burgeoned after Benjamin Britten's spectacular and enduring postwar falling-out with John Christie. But the younger Christie's nous and determination – George lacked his father's overbearing personality but inherited his steel – combined with the managerial talents of the team headed by Moran Caplat to steer the festival towards solvency and more.

Christie's three great achievements at Glyndebourne came in a clear chronological order. The first was to put the finances straight. Without either the inclination or the funds to finance the whole festival from his own pocket, and determined to continue the policy of not applying for Arts Council subsidy, Christie went to the City to form a high-powered finance committee to raise money from industry and the rich. It was massively successful, decades ahead of its time, and put the festival back in the black, while at the same time subtly moving it away from its pre- and post-second world war roots in county society towards the more cosmopolitan and corporate identity it sports today. But it also helped Christie to add an autumn touring arm to Glyndebourne, with public subsidy this time, bringing Sussex productions to cities around the south and the Midlands at much lower prices.

Though Christie could sometimes appear understated and diffident – a persona that was genuine in some ways and convenient in others – he developed increasingly sure artistic instincts on the back of the stronger financial position. His artistic achievement at Glyndebourne rested more than anything on the hiring of Peter Hall as a director in the early 1970s to join John Cox, followed by the appointment of Bernard Haitink to succeed John Pritchard as music director later the same decade. Between them, they helped to generate some of the productions that defined a new Glyndebourne style, of which Hall's trilogy of Mozart operas to librettos by Lorenzo da Ponte and his Britten Midsummer Night's Dream were emblematic. It was a golden era for Christie.

Stage crew preparing the set for a production of Benjamin Britten's Billy Budd at Glyndebourne, August 2013. Photograph: Oli Scarff/Getty Images

Although Glyndebourne was always, and to a large extent still is, a place of social privilege – "rarity is a commercial asset, so we need to ration and retain our allure," Christie used to say – he was also a genuine artistic reformer, even a progressive. He sanctioned risk and innovation, though he never allowed Berg's Wozzeck to enter the Glyndebourne repertoire: "I said no. It's not going to happen." He nevertheless presided over a significant broadening of the core Glyndebourne repertoire to include Strauss, Stravinsky – David Hockney's 1975 design for The Rake's Progress is still a classic – and, in particular, Janáˇcek. He brought a Porgy and Bess with an all-black cast to the Glyndebourne stage in 1986, directed by Trevor Nunn and conducted by Simon Rattle. Under Anthony Whitworth-Jones's managership in the 1980s and 90s he introduced Glyndebourne commissions of new operas by composers including Nigel Osborne, Jonathan Dove, Oliver Knussen, Michael Tippett and Harrison Birtwistle. Before his retirement, Glyndebourne even toured America.

Yet if any one thing in his life confirmed Christie's determination not to allow Glyndebourne to remain a museum but instead to ensure that it moved with the times, it was his very personal decision to tear down the old Glyndebourne and replace it with a new one in a brilliantly executed two-year construction project which began in 1992 and ended in time for the festival to reopen in 1994. "I was quite unsentimental about the old theatre," he told me in 1994. "Of course I loved it in many ways, but it was tired, threadbare and inadequate." It certainly was. In particular, the position of the theatre was wrong by 180 degrees, so the public entrances were squeezed in between the Christies' house and the Downs behind, while the backstage faced out into the gardens.

The new 1,200-seat theatre, designed by Michael and Patty Hopkins and approved by Christie, was turned around, extending and modernising the backstage, rehearsal and administrative spaces while simultaneously bringing the public entrances to the garden side. The curved wooden interior of the new theatre was a triumph for Christie, and it sealed his four decades at the Glyndebourne helm. On his 65th birthday, on 31 December 1999, Christie handed the chairmanship of the board to Gus.

Christie's life and career were blessed by good decisions, and he always remained rooted in Sussex life, surrounded by his favourite pug dogs, proud of the improbable family connection to Lady Godiva – "another reluctant exhibitionist in a good cause", he would call her. He was knighted in 1984 and made a Companion of Honour – like his father before him – in 2002.

He is survived by Mary and his children, Hector, Gus, Ptolemy and Louise.

• George William Langham Christie, opera festival director, born 31 December 1934; died 7 May 2014